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The Market Explained by candle sticks and price action

  • #21
  • Jan 31, 2010 9:09am Jan 31, 2010 9:09am
Quoting Fuzzyzc
All three of us share the same idea about markets this is ridiculous that we are arguing about this.

Markmm it says your a...
Ok, great....if you understand this you are better than majority here!
But, I dont see how the candlestick types have anything to do with finding
a stophunt targets!???
I agree that highs and lows have some meaning, but open and close?????
If you substract O and C from candlestick, it is not a candlestick anymore....
at least in a original form, so there goes your bar analisis!

Pinbars, iB and OB....etc, doesnt have any meaning in orderflow.
All you need to look is the H & L of bars....it is the range cluster of orders at given time period....I realy dont see a point of O & C.....to me, It doesnt have any meaning....it is just a place where used time period has closed/opened....nothing more, nothing less!

Fuzzyzc, I dont want to be rude, but ask yourself, is thare any edge in candlestick analisis!??
I for sure know that there is nothing in them, except price movement in used time period.

Regards, and sorry for hijacking your thread.
  • #22
  • Jan 31, 2010 9:56am Jan 31, 2010 9:56am
Quoting Parazite
Ok, great....if you understand this you are better than majority here!
But, I dont see how the candlestick types have anything to do with finding
a stophunt targets!???
I agree that highs and lows have some meaning, but open and close?????
If you substract O and C from candlestick, it is not a candlestick anymore....
at least in a original form, so there goes your bar analisis!

Pinbars, iB and OB....etc, doesnt have any meaning in orderflow.
All you need to look is the H & L of bars....it is the range cluster of orders at given time period....I...
I respectively disagree that Candle sticks don't have any meaning in order flow.
They can give us Clues into what has happened and how to profit.
Highs and Lows i will agree weigh much more on importance specially on higher time frames.

Attached Image


Shit i forgot to add Z section is the one before A and B is after A. Each bar is labeled 1234 in the sections
I do believe candle sticks help us find clues about sentiment.

I do agree 100% its not necessary to use candle sticks and still have alot of good trades using just the high and the low but the close and open shows us the battle. Who is winning. If bulls were not present the close will not be above the open and if the close is below the open then bears won. If the open and close are close to each other nobody won.

We need every advantage we can get.
  • #23
  • Jan 31, 2010 10:58am Jan 31, 2010 10:58am
Quoting Parazite
Good luck trading the candlesticks.....you will need it!
More then an argument about candlesticks, it looks like one against charts.
Are you saying that charts are pointless as they are a snapshot themselves?

If you are, and you only trade price, not using charts, it would be interesting to learn how you do it, in a dedicated thread of course.
  • #24
  • Jan 31, 2010 1:14pm Jan 31, 2010 1:14pm
candlestick shows the psycology in the market right like fear and gread i have also heard that it is like fibb numbers and other thing an self fullfilling thing if many looks at it the higher timeframe the better so it is with everything like S and R also.


Does candlestick really need to work or is it ok to enter the market and we have a 50 50 chanse and we make money if we have a great MM


best regards
  • #25
  • Jan 31, 2010 1:28pm Jan 31, 2010 1:28pm
Quoting jgadefelth
candlestick shows the psycology in the market right like fear and gread i have also heard that it is like fibb numbers and other thing an self fullfilling thing if many looks at it the higher timeframe the better so it is with everything like S and R also.


Does candlestick really need to work or is it ok to enter the market and we have a 50 50 chanse and we make money if we have a great MM

best regards
In my opinion Candlesticks are one of the best ways to easily sum up everything Greed, Fear, Profit taking, Entrance and exit. Basically full sentiment.


I dont know about fibbs i kind of feel they are a self fulfilling indicator. I have heard of good results when price action reading and fibb numbers, but fibbs arent for me personally.

It has been theorized that a 50 50 coin flip entry can work with the right exit and money management. I wouldn't recommend it though if you want to guess and have a crap ton of patience and balls i would say look at a daily if price is below a 30 day moving average go short and vice versa. The best bet is with the trend. The swings in that system can be ridiculous though.

IMO higher time frames are where its at not saying you cant make money lower but it all depends on your preference. i think its alot harder to fake out people in higher timeframes but it does happen i got caught on the wrong side of a 100 pip move one time trading H4 bars that was a nightmare, but shit happens. My MM saved my ass on that one though.
  • #26
  • Feb 2, 2010 10:48pm Feb 2, 2010 10:48pm
my brain is not big enough i suppose to understand some of what you guys are saying but if i understand fuzzy like i think i do he is correct ( in my opinion only of course).

predicting future price movement based on a current daily bar is what i do and have done for years.

i recently did a month of it on video with a success rate of around 90 percent. i didnt keep track but thats my guess. maybe someone actually counted the wins/losses and can post it.

its in the member area but maybe i will move the entire series into the guest side.

so why am i posting this here?

because fuzzy pm'ed me and asked me to critique his thread.

i dont use candles but there is no difference between candles and bars.

they tell the same story.

good luck with your thread fuzz and contact me if you ever need anything,

jim





Quoting Fuzzyzc
I'm flabbergasted i have to explain this but ... trading has everything to do with history of price if we traded every bar or price without reference to the last or an idea where it could. I would be pure gambling. Trading is not gambling and if you think it is you don't understand organized markets.
  • #27
  • Feb 5, 2010 12:44pm Feb 5, 2010 12:44pm
Quote
Candlesticks simply show the history of price, they are of no value in predicting the future direction of price. Just like me telling you the USD/JPY was at 92.34 on Tuesday at 3:34pm gives you no indication of the future price.

I hope you were allright when you had said the above thing. One needs brain to decipher what previous day candlestick is signaling.

Go and read candlestick theory, practice it on charts and then you can do some justice to great art of candlestick.
  • #28
  • Feb 5, 2010 12:46pm Feb 5, 2010 12:46pm
Quote
my brain is not big enough i suppose to understand some of what you guys are saying but if i understand fuzzy like i think i do he is correct ( in my opinion only of course).

predicting future price movement based on a current daily bar is what i do and have done for years.

i recently did a month of it on video with a success rate of around 90 percent. i didnt keep track but thats my guess. maybe someone actually counted the wins/losses and can post it.

its in the member area but maybe i will move the entire series into the guest side.

so why...

Great post from a great trader.
  • #29
  • Edited 6:30pm Feb 5, 2010 6:03pm | Edited 6:30pm
Quoting Parazite
Good luck trading the candlesticks.....you will need it!

Twoblink....hope you dont mind borowing this

....
I have said time and time again, if you don't know calculus, then you don't know...


A snapshot is an instantaneous function of some storage systems that presents a copy of the filesystem as if it was frozen in a specific point in time, often by a copy-on-write mechanism. An effective way to back up live data is to temporarily quiesce it (e.g. close all files), take a snapshot, and then resume live operations. At this point...
Neat ideas you introduced. Several points to consider:


In a way, you're justifying use of oscillators (which I usually reject due to lag) over or at least with candles.

Another ff math aficionado's links googled this to here, for this quote: " payoffs related to realized volatility can be achieved which have either no exposure to price, or which have an exposure contingent on certain price levels being achieved in specified time intervals. "

Your EKG chart, which is like an oscillator, seems to measure volatility. Candles attempt to measure trend when they reflect volatility. To isolate the negative effect of trend on volatility, an second oscillator would have to measure the unit of time one has a stable direction within a tradeable volatility.


Also, you condemn candles as being a snapshot only if lots of candles are considered, or a "lie" if only a few candles are considered. Maybe if you consider charts in light of statistics, it would make more sense to use candles.
Statistics (as I see it relates to trading) anchors the probability of an event from random sources to obtain a pivot in peoples' opinion, that is where a decision on the subject being polled on would turn -- how five to twenty-five candles will relate to a trendline, for example, to determine where price changes its general trend.

Take a poll and you get all sorts of scenarios polltakers are in, from which a choice will be made to define the given subject. Similarly, different broke rs' charts or 'snapshots' in each chart provide all sorts of scenarios to define how price will relate to a trendline over time; specifically, it's the same, parallel time for different broke rs' charts, and very close, series of times for your 'snapshots'.
For each person that polls, their explanation for the answer they give to the poll makes sense for their life situation. Similarly, each parallel or serial processing of the same decision-making area on the chart produces the same pivot for the trend.
Candles, taken as one or a pattern, manage to relate to each other in the same way each one of those peoples' lives relate for one answer to where the pivot is.


Finally, you noted that high and low of a candle are all that should be considered. Since candles only work relative to each other, even if you only study one candle and look for a candle with a characteristic shape, then the entire candle counts, only in different situations or technical methods that use candles.
Examples: The exact middle of a spinning top is useful if the spinning top is at the last of a symmetric triangle; the high and low of a candle may be useless if the candle is in the middle of a several-candle run; and, the base of a candle's body may be useful instead of the candle's shadow-included low if another, former candle significantly overlaps this candle as it creates an overall pivot.


Good trading to you.
  • #30
  • Feb 5, 2010 6:47pm Feb 5, 2010 6:47pm
Quoting kingfisher
I hope you were allright when you had said the above thing. One needs brain to decipher what previous day candlestick is signaling.

Go and read candlestick theory, practice it on charts and then you can do some justice to great art of candlestick.
If you are driving down a bendy road, will you try and predict the future direction by looking out the rear view mirror? If the road is straight (trend) then this might work for a while, but in the end everyone will crash. I only use charts to record prices movements while i cant be at the computer, never to use it as the basis of my trading.
Economists have forecast 9 out of the last 5 recessions
  • #31
  • Feb 6, 2010 6:48am Feb 6, 2010 6:48am
Quoting markmm
If you are driving down a bendy road, will you try and predict the future direction by looking out the rear view mirror? If the road is straight (trend) then this might work for a while, but in the end everyone will crash. I only use charts to record prices movements while i cant be at the computer, never to use it as the basis of my trading.
Pretty sure that's possible tbh. As long as you have patience, going slowly to only pick the best entries I mean turns, and have good money management I mean sense of direction.

Seriously whatever has been said here totally undermines technical analysis itself, which has been proven by how many threads? J16 for one..
  • #32
  • Feb 6, 2010 11:15am Feb 6, 2010 11:15am
Quoting Sim
Pretty sure that's possible tbh. As long as you have patience, going slowly to only pick the best entries I mean turns, and have good money management I mean sense of direction.

Seriously whatever has been said here totally undermines technical analysis itself, which has been proven by how many threads? J16 for one..
None.
Economists have forecast 9 out of the last 5 recessions
  • #33
  • Feb 6, 2010 11:22am Feb 6, 2010 11:22am
What? That's not even an answer
  • #34
  • Feb 6, 2010 12:06pm Feb 6, 2010 12:06pm
Quoting Sim
What? That's not even an answer
I mean no thread has proven TA works, over the long term the distribution will tend to 50/50, unless you combine it with some other information not seen in the charts.
Economists have forecast 9 out of the last 5 recessions
  • #35
  • Feb 6, 2010 12:11pm Feb 6, 2010 12:11pm
Untrue. Many people make consistent pips using charts only...all week I entered on pullbacks after some TA...did quite well... didn't look at any other info although it could well have enhanced my trading. Was it just luck in your eyes?
  • #36
  • Feb 6, 2010 12:35pm Feb 6, 2010 12:35pm
Quoting Sim
Untrue. Many people make consistent pips using charts only...all week I entered on pullbacks after some TA...did quite well... didn't look at any other info although it could well have enhanced my trading. Was it just luck in your eyes?
Yeah that's my opinion, I'm may be wrong but that's how I view it.
Economists have forecast 9 out of the last 5 recessions
  • #37
  • Feb 6, 2010 12:49pm Feb 6, 2010 12:49pm
Cool. I can understand it to an extent.. but to me it's an edge that comes only with experience, with the general self fulfilling prophecy working both ways, beneficial and not
  • #38
  • Feb 6, 2010 1:12pm Feb 6, 2010 1:12pm
Of the few successful trader around, some, use only technicals, some other only fundies, some consider short term 2 hrs, some other 2 years... and so on.
But to say that it doesn't work just because doesn't work for you.
  • #39
  • Feb 6, 2010 3:58pm Feb 6, 2010 3:58pm
Quoting cesare76fx
Of the few successful trader around, some, use only technicals, some other only fundies, some consider short term 2 hrs, some other 2 years... and so on.
But to say that it doesn't work just because doesn't work for you.
I think there are lots of ways to make money in the markets, they are not easy to find though, there isn't one Holy Grail, there are many edges and you have to find one and execute it to the maximum potential, and that requires some time to measure and some math to work out the figures for risk, expectancy etc.
Economists have forecast 9 out of the last 5 recessions
  • #40
  • Feb 7, 2010 7:24am Feb 7, 2010 7:24am
Attached Image


Where do you think the easiest and best way to trade this chart SIM?

Those Corrective moves are where market heuristics keep playing games with us. There was a series of events that occurred before this nice movement unfolded that will play a very important role in the psychology of this down trending section.

Attached Image
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